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Financial services in Tampa Bay


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Financial services in Tampa Bay growth, impacts, and opportunities
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35 p. : col. ill. ; 28 cm.
University of South Florida -- Center for Economic Development Research
University of South Florida, Center for Economic Development Research
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Tampa, Fla
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Financial services industry -- Florida -- Tampa Bay Region   ( lcsh )
Economic conditions -- Tampa Bay Region (Fla.)   ( lcsh )
Commerce -- Tampa Bay Region (Fla.)   ( lcsh )
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non-fiction   ( marcgt )


Includes bibliographical references (p. 35).
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Title from cover.

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usfldc doi - C63-00076
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Financial Services in Tampa Bay: Growth Impact and OpportunitiesExecutive SummaryTampa Bay's Financial Services Industry supplies a full range of financial services across all Tampa Bay business sectors. A smaller but significant segment of the industry serves national and international clients. Finance, insurance and real estate (FIRE) produce combined output valued at $26 billion annually17% of total output in Tampa Bay. Direct spending ripples throughout the entire regional economy, and is associated with total output of $44 billion in the Tampa Bay region. Each dollar of FIRE output thus generates $1.71 of total output in Tampa Bay. Total spending of $44 billion associated with financial services activity supports 382,000 jobs in Tampa Bay. TampaBay s financial services industry is not a collection of customer service centers. A USF survey of 67 large employers covered 37,232 employees. Survey respondents reported 4,876 call center employees, just 13% of all employees. Neither is the industry a repository of low-wage, dead-end jobs. Average earnings reported by employees in FIRE who were covered by unemployment compensation were $39,052 in 1998. The average wage for all covered workers in the region was $28,563 nearly $10,000 less than financial services earnings. Wages in all manufacturing in the region were $33,100 nearly $6,000 less than financial services earnings. Finance and insurance companies are an important ingredient in the development of a hightechnology environment in Tampa Bay. The Financial Services Industry Cluster in Tampa Bay includes finance-related business services and administrative support firms, who are prime suppliers of services to the industry. Finance and insurance companies are: Important clients for several professional and technical industries Employers of educated and skilled professionals and technicians Developers of human capital through training and support of regional education Suppliers of capital and financial expertise to high-tech businesses in Tampa Bay. The USF survey of finance and finance-related firms found that 80% of Tampa Bay legal firms, 33-50% of Tampa Bay accounting firms, and 25-50% of computer and other business support services report finance firms as clients. The survey found that insurance carriers were clients of 80% of legal firms, 50% of accounting firms, and 100% of computer and other business support firms. The Financial Services Industry Cluster is big business in Tampa Bay. In 1998, 15,520 finance and finance-related establishments in Tampa Bay reported employment of 157,311 persons. Finance and insurance companies employed the majority of these individuals. The U.S. 1997 Economic Census detailed employment and payroll of finance and finance-related businesses in Tampa Bay. Major employers in financial services included depository institutions such as commercial and savings banks and credit unions, non-depository lenders such as personal credit, business credit, and mortgage credit institutions, securities dealers and brokers, and insurance carriers and agents. Employment and wages vary across these financial industry segments."


AverageAnnual Firm Type "##$ EmploymentSalaryDepository Institutions 23,289$28,353 Non-depository Credit Institutions 7,21340,420 Securities Dealers and Brokers 6,99665,261 Insurance Carriers 20,87537,982 Insurance Agencies 12,57235,215 Employment in finance and insurance has trended away from lower wage jobs and toward higher wage jobs. Employment in Tampa Bay depository institutions declined over the 10-year period 1989-1998. By 1995, employment had fallen to less than 70% of its 1989 level. Bank employment has since climbed back to 82% of 1989 levels. In contrast, Tampa Bay employment in higher-wage non-depository credit institutions during 1998 rocketed to 300% of its 1989 level. High-paid security dealers and brokers doubled over the same period. Insurance employment has grown steadily, keeping pace with Tampa Bay s rising population and business activity. Insurance carriers added 45% to the workforce from 1989-1998, and employment by insurance agents rose 25% over that period. Business services and administrative and support services are major suppliers to finance and insurance companies. Employment and earnings according to the 1997 Economic Census are:AverageAnnual Firm Type "##$ EmploymentSalaryReal Estate 12,833$21,684 Legal Services 13,15750,606 Accounting and Related Services 20,64026,084 Management Consulting Services 6,42041,902 Computer Systems Services 9,77251,526 Administrative and Support Services 203,69916,806 Employment in real estate in 1998 fell to just over 80% of its 1989 level. The size of administrative and support employment in 1997 reflects outsourcing of administrative functions by all types of businesses in Tampa Bay. Seventyeight percent of administrative and support employees work in personnel services firms, including temporary employment agencies and employee leasing firms. Other types of administrative and support services reported include telephone call center operations, which employed 4,977 in 1997 and business services firms that employed 1,132. Personnel services firms supply employees to all industries in Tampa Bay not just to financial services firms and even reflect employees working outside the region. Finance and finance-related firms employ educated, skilled workers. Financial services firms rank second nationally after mining in the percent of firms offering formal educational training on the job. USF s survey of 67 large Tampa Bay employers confirms the importance of education and workforce training programs. Tampa Bay's finance and finance-related businesses have supported regional secondary education, community colleges, and universities in the development of educational programs in accounting, finance, and in the information and decision sciences. Regional educational institutions in turn have supplied skilled workers to the financial services cluster. USF s survey evaluated the characteristics of 7,417 professional specialty and technical employees in 67 large finance, insurance, real estate and business services firms. Seventy-eight percent reported average age over 34 years and 77% reported technical employees averaged 6 or more years of experience with the reporting firm. Of 61 responding firms, 89 percent indicated that the majority of their technical and professional employees were college graduates. One-quarter of responding firms indicated that most employees had post-baccalaureate degrees.%


Finance and finance-related businesses will continue to be agents of change. Increasingly competitive markets continue to allocate household savings to their most efficient risk-adjusted uses. Financial markets generate new tools to manage firm and market risk. Evolving international monetary and securities markets lead to a less regulated financial environment. Deregulation fosters increasing competition and market efficiency. Financial firms experience relentless pressure on profit margins. Continued viability of every finance firm hinges upon management s ability to innovate and to adapt to changing market conditions Competition is increasing within and across financial business sectors. New financial products, that can be bought and sold on secondary markets, bring banks, insurance companies and a variety of credit companies into direct competition for new lending opportunities. Deregulation of commercial banking is resulting in banking consolidation. National banks, regional banks, and community banks now compete for deposits and issue loans in Tampa Bay on a county-by-county basis. The growth of the internet has profound implications for financial services. As online finance gains momentum the importance of location will fall in financial transactions and transactions costs will decline. Those firms that are able to adapt products and services to the new virtual environment will grow and prosper, while those that stick to existing business practices will be marginalized. Tampa Bay is positioned for continued leadership in financial services. Because the financial industry is a foremost consumer of information, advances in telecommunications and computing technology are changing the face of the financial services industry. Cost-competitive regions like Tampa Bay are becoming centers for technical and administrative support facilities for industry giants such as Citicorp, Progressive, MetLife, Chase, and Ceredian Benefits. These and other firms have facilities in Tampa Bay that serve national and international client bases. Continued population growth and increased activity of non-financial Tampa Bay businesses should create additional business opportunities for financial services businesses that primarily serve customers in Tampa Bay. Regional divisions of national banking concerns as well as community banks, securities dealers and insurance companies in Tampa Bay can expect to see their customer base increase. A caveat is that traditional financial customer services will have to deal with increasing competition from on-line providers in coming years. The challenge for financial services firms is to exploit the new technology to lower operating costs and raise volume, and to pass the savings on to customers. A further caveat is that the well-being of all finance and finance-related firms is closely tied with the health of international financial markets. The new international financial system of market-based competition within flexible exchange rates and unrestricted capital flows has withstood crises in the Far East and in Latin America in recent years. How well the international financial system will cope with sustained declines and volatility in exchange rates, interest rates, and equity prices in the developed world remains to be seen. &


Table of ContentsI INTRODUCTION ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' '''''''''''''''''''''''''''''''''''''''''''''''''''$OBJECTIVESOFTHETAMPABAYFINANCIALSERVICESSTUDY.................................................................................................7 DEFINITIONS............................................................................................................................... ......................................7Financial Firms and Financial Markets Defined................................................................................................................7The Finance Function Defined............................................................................................................................... .......7II A NATIONAL INDUSTRY IN TRANSFORMATION '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''(ECONOMICEXPANSIONGENERATESGROWTHINTHEVOLUMEANDDIVERSITYOFFINANCIALSECURITIES....................................8 REVOLUTIONANDREACTION............................................................................................................................... ...............8Major Federal Legislation Impacting Financial Services: 1980-2000..................................................................................9 INTENSIVECOMPETITIONDRIVESCHANGE..........................................................................................................................10III TAMPA BAY FINANCIAL SERVICES: A REGIONAL INDUSTRY IN TRANSFORMATION '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''""TAMPABAY'SFINANCIALSERVICES1980-2000.................................................................................................................11 FINANCIALSERVICESRESPONDTOGROWTHINTHETAMPABAYECONOMY............................................................................11 FORMATIONOFAFINANCIALSERVICESINDUSTRYCLUSTERINTAMPABAY............................................................................12 COMPETITORS, SUPPLIERS, ANDCUSTOMERS....................................................................................................................12A Timeline of Regional Developments..........................................................................................................................13 DEREGULATION............................................................................................................................... ...............................14 HUMANRESOURCES, EDUCATIONANDTRAINING................................................................................................................14 INFRASTRUCTURE............................................................................................................................... .............................15IV SIZE STRUCTURE AND IMPACT OF TAMPA BAY’S FINANCIAL CLUSTER ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''")ESTABLISHMENTSANDREVENUESIN1997........................................................................................................................16 SERVICESANDACTIVITIESOFTAMPABAY'SFINANCIALSERVICESCLUSTER............................................................................17 TAMPABAY'SFINANCEANDRELATEDINDUSTRYCLUSTER: CUSTOMERBASE........................................................................20 IMPACTOFFINANCE, INSURANCE, ANDREALESTATEONTAMPABAY....................................................................................21V FINANCE AND RELATED BUSINESSES: EMPLOYMENT TRENDS IN TAMPA BAY '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''%%EMPLOYMENTINFINANCE, INSURANCEANDREALESTATE....................................................................................................22 EMPLOYMENTINBUSINESSSERVICES............................................................................................................................... .25 OCCUPATIONALCHARACTERISTICSOFFINANCEANDRELATEDWORKERS..............................................................................25 INCENTIVES, HIRINGANDPROMOTION, ANDWORKINGCONDITIONS......................................................................................27VI FINANCE AND RELATED BUSINESSES: EARNINGS TRENDS IN TAMPA BAY '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''%(FINANCIALSERVICESEARNINGS............................................................................................................................... .........28 BUSINESSSERVICESEARNINGS............................................................................................................................... .........30 OCCUPATIONALEARNINGS............................................................................................................................... .................30VII REAL ESTATE AND INFORMATION TECHNOLOGY IN TAMPA BAY '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''&*VIII THE FUTURE OF THE FINANCIAL SERVICES INDUSTRY IN TAMPA BAY '''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''&%REGIONALGROWTHANDMATURATION..............................................................................................................................3 2 REGIONALCOMPETITION............................................................................................................................... ...................32 NEWTECHNOLOGIESANDINTERNETFINANCE....................................................................................................................33IX BIBLIOGRAPHY ''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''' ''''''''''''''''''''''''''''''''''''''''''''''''''''&++


Financial Services in Tampa Bay: Growth Impact and OpportunitiesI IntroductionObjectives of the Tampa Bay Financial Services Study. The objectives of the study are threefold: To inventory the set of interrelated financial activities present in the seven counties of Hernando, Hillsborough, Manatee, Pasco, Pinellas, Polk, and Sarasota, and to identify the large firms who engage in these activities to produce financial services for Tampa Bay businesses. The regional finance sector is delineated as a cluster of interrelated activities that interact in a functional way as suppliers, competitors and customers. The report attempts to identify the services provided to customers and to determine which sectors of the industry provide those services. To measure the impact of financial services on employment and income generation in Tampa Bay. To identify the growth opportunities for financial services firms in Tampa Bay and the challenges to continued health of the industry. Definitions. CEDR s definitions of the finance function in the firm, the financial industry, and financial markets have guided the collection of data, the review of the literature, and the discussion of regional financial industry activity. Financial Firms and Financial Markets Defined. Financial firms participate in regional, national and international primary and secondary financial markets. Primary financial markets arrange for the issue of new financial securities and for the production and sale of new real assets. Secondary markets facilitate the exchange of existing securities. Financial firms provide clients with access to credit and equity markets and to the national and international payments systems. Financial firms support other firms, individuals, and government units in the purchase, sale, and leasing of real and financial assets. Financial firms assist other industries, indi viduals and government units in the performance of one or more of the activities that comprise the finance function. The Finance Function Defined. All firms engage in financial activity in their day-to-day operations. Within the typical firm, the finance function includes: Acquisition, disposition, and recording of the firm s assets and of all claims on the firm s assets. The comptroller s and treasurer s activities to control and record the firms operating cash flows the flow of the firm s operating revenues and expenses. Planning and budgeting. Recording, managing and paying the firm s income, sales, and property taxes.$


II A National Industry in Transformation 'The financial services sector has experienced rapid growth and change over the past three decades. Evolving structures of international exchange and payment, changes in national legal and regulatory frameworks, innovations in technology and changes in financial markets and financial products sold in financial marketplaces have combined to transform financial services firms nationally and in Tampa Bay. Economic Expansion Generates Growth in the Volume and Diversity of Financial Securities. The past twenty years have witnessed unprecedented growth of the United States economy. Gross domestic product (GDP) has increased at an average annual rate of 6.2 percent. Moreover, economic growth has been remarkably steady. The pattern of recession and expansion that marked GDP during the 1960s and 1970s gave way to nearly continuous growth the expansion beginning in 1982 has been marred only by a short decline in real GDP during the second half of 1990. The value of the U.S. financial sector s output has been growing in relation to the economy over this extended expansion. The rising importance of financial services illustrates the increasingly market-oriented nature of finance in a climate of renewed economic liberalism and deregulation. Growth also underscores U.S. financial services lead role in the globalization of finance and reflects the rising capitalization of wealth in an era of stable prices and bullish economic expectations. Chart 1 summarizes the growth of financial markets and their importance in the new U.S. economy. The chart reveals the value of assets and the value of claims on assets and credit market debt in the U.S. economy over the period 1980-1999 outstripped increases in GDP. Chart 2 shows the relative growth of asset values per dollar of U.S. GDP. Clearly the dominant trend in Chart 2, in keeping with recent performances of the equities markets, is the rise in the value of corporate equities. The value of corporate equities rose from $.60 per dollar of GDP in 1980 to $1.80 in 1999. Growth in equities also shows up in the increases in mutual funds per dollar of GDP and in pension funds per dollar of GDP. Non-corporate equity, on the other hand, fell from nearly $.80 per dollar of GDP to about $.50 per dollar of GDP, reflecting the rapid rise of securitization of equity. Nationwide, 395,000 finance and insurance business establishments produced annual revenues of close to $2.2 trillion in 1997. This amounted to annual revenues of about $5.6 million per firm. Annual revenues were over one-quarter of U.S. GDP, which totaled $8.1 trillion in 1997. Nationally, 221,650 real estate firms produced revenues of $153 billion, or $691,000 per firm. Revolution and Reaction. In 1970, the U.S. financial industry and financial businesses in many other advanced economies operated in a strict regulatory environment. The U.S. regulatory system embodied reforms instituted during and after the 1930s as governments responded to widespread bank failures and industrial bankruptcies that occurred during the Great Crash of 1929-1933. In Europe, South America, and much of Asia the regulatory environment had roots in dirigiste policies inherited from pre-WWII economic systems. Chart 1 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,0001980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999YEAR$BILLIONS TOTAL CAPITAL ASSETS CREDIT MARKET DEBT GDPGDP, Total Capital Asset, and Credit Market Debt: 1980-1999 Chart 2 Asset Classes per Dollar of GDP: 1980-1999 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 $1.60 $1.80 $2.001980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999YEARDOLLARS CORPORATE EQUITIES NON-CORPORATE EQUITY MUTUAL FUND SHARES PENSION FUNDS TRADE PAYABLES MONEY MARKET (


Worldwide, highly regulated and segmented financial services industries changed radically from 1971 through 1999. Financial businesses continue to adapt to the resulting changes in the competitive environments in which they operate. The pace of change will be maintained in the future. This change was motivated by a number of factors: the demise of the Bretton Woods fixed exchange rate system in 1971 and its replacement with a mixed regime of flexible, pegged and regionally fixed exchange rates resulted in wider fluctuations in exchange rates and interest rates than had been experienced in the post WWII period. Credit depository institutions proved unable to adjust to the swings in credit availability, the cost of credit, and exchange rates under the then-existing regulatory environment. Fear of widespread failures of certain classes of financial enterprises prompted U.S. and other governments to institute an ongoing process of deregulation. Federal legislation beginning in 1980 and extending through the mid-1990s reconfigured the national system of depository institutions. Regulatory oversight was lessened and competition for funds and for customers increased. Major federal legislation impacting financial services: 1980-1999. 1980 Depository Institutions Deregulation and Monetary Control Act. Removed existing regulation on loan and deposit interest. 1981 Depository Institutions Act. Relaxed restrictions on bank mergers and acquisitions. 1986 Tax Reform Act of 1986. Altered taxation of depreciable assets and capital gains on sales of assets. 1989 Financial Institutions Reform, Recovery, and Enforcement Act. Further relaxed restrictions on bank mergers and reduced legal distinctions between types of depository institutions. 1994 Interstate Banking and Branching Act. Established the legal framework for a national network of interstate banks and bank branches. 1999 Gramm-Leach-Bliley Act. Repealed Glass-Steagall Act s separation of commercial and investment banking and allowed affiliations between commercial banks and insurance companies. Discovery of new concepts and tools for finance practitioners led to a continuing series of innovations in financial markets, which have spawned new products and new services. Newfound leverage techniques have been used to profoundly restructure the U.S. corporate environment, merging like companies and breaking up conglomerates. Interest rate risk and currency risk are managed using newly formed markets in swaps, options, futures, and myriad other instruments. Primary market contracts previously restricted to institution-client relationships have been securitized, adding new types of securities to financial portfolios. The continuing process of disintermediation promises to further alter the financia l landscape in the coming century. Securitization the creation of new classes of asset-backed securities has been important for the growth of financial services firms in Tampa Bay that specialize in issuance and service of these securities. Chart 3 summarizes the volume of U.S. debt markets from 1990-1998. Over the eight-year period, when U.S. GDP rose by 52.5 percent and Florida GDP rose by 65.5 percent, outstanding U.S. corporate debt rose by 79 percent. Over the same period, the volumes of mortgage-and other-asset-backed securities ballooned by 135 percent. Innovations in computer and telecommunications technology have further facilitated the spatial dispersion of information and in this way reduced the cost of doing business over long distances. Innovations in information technology have fostered the growth of larger multi-region financial organizations and have initiated a process of regional diversification of services and activities within firms that promises to have significant impacts on the pattern of financial services employment across states and metropolitan areas in the U.S. Innovations in information systems and data automation have contributed to the centralization of data processing, customer service, and transit operations of financial services firms in specific locations. Financial services firms have made major investments in information technology. A congressional study found that information technology investments by banks and insurance carriers rose from $2.6 billion in 1982 to $20 billion in 1989. Craig (1997) found that the increase in information technology shifted the skill levels in banking upward. The proportion of professionals in banking rose from 10 percent in 1975 to 18 percent in 1995. Chart 3 US Corporate Debt and Asset Backed Securities Outstanding: 1990-1998$0 $500 $1,000 $1,500 $2,000 $2,500 $3,0001990 1991 1992 1993 1994 1995 1996 1997 1998YEAR$BILLIONS Corporate debt Mortgage & Other Asset Backed SecuritiesSource: U.S. Statistical Abstracts, 1997, 1998, 1999. #


Information technology has enabled financial firms to relocate support activities to areas that have skilled workforces but that experience lower costs of living and lower employee costs. This trend promises to further weaken the link between financial services employment in a region and the region s population. The growth of internet banking and brokerage also promises to bring more change to the U.S. banking and securities industry sectors. New technologies, possibly eschewing traditional banking assets, new management structures and new dispersed methods of sales and distribution of bank products will compete for commercial banks core business services. Uncertainties related to new technologies have dampened bank share prices even while industry earnings have been healthy. Securities brokers and traders face new competition from on-line brokerage houses and alternative trading networks. Intensive Competition Drives Change. As the barriers to competition fell in the 1980 s and 1990 s, individual financial sectors intensified competition for both the supply of and demand for investment funds. Competition widened within and between traditionally segmented and regulated financial sectors in the U.S. and internationally. Credit intermediaries have undergone three rapid waves of competition for their traditional business. The first wave, stimulated by restrictions on rates of interest on deposits witnessed the movement of deposits to money market funds and into other liquid liabilities. Competitors for banks loan products initiated a second wave of competition for banks loan business. Financial companies initiated new types of short-term asset backed corporate securities such as commercial paper and new consumer credit instruments. Banks countered by moving into the new markets with commercial lending facilities, credit card subsidiaries, and option, swap, and futures products. In a third phase, banking consolidation and adoption of information technology spurred growth of transit, consumer credit and other support operations. Insurance carriers, insurance agencies and securities firms, historically subject to fewer location restrictions than banks, traditionally have operated as multi-state and multi-regional organizations. While there has been no recent geographic concentration in the management and sales functions of the two industry sectors compared to that of commercial banks, securities firms and insurance companies have participated in the expanded competition among financial products. Securities firms began to offer investors consolidated accounts including money market and checkwriting privileges. Life insurance companies expanded insurance products and unbundled investment and insurance coverage in universal life policies. And both sectors have responded to changes in information technology by locating support activities away from major financial centers. Response to innovation and technical change in the financial services sector has mirrored trends in other industries. The volume of trading and asset generation has been accomplished with a roughly constant labor force. Chart 4 shows changes in finance, insurance and real estate employment in the U.S. from 1990-1998, reported by Standard Industrial Classification (SIC) code. Over the period 1990-1998 employment in the depository institutions and insurance sectors rose by only 10 percent from 5.4 million to 5.9 million. Employment in banking reflected consolidation and automation employment actually declined by 208,166 over the eightyear period. The decline in depository institution employment was more than offset by increases in non-depository credit institutions, which increased by 76 percent, or 285,083 employees, and by securities trading and brokerage businesses which added 220,250 individuals, 52 percent of 1990 employment. Insurance carriers and agencies posted more moderate employment growth. The insurance industry added 217,917 employees between 1990 and 1998, an increase of 10 percent from 1990 insurance industry employment. Chart 4 U.S. Employment in Finance, Insurance and Real Estate: 1989-19980% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200%1989 1990 1991 1992 1993 1994 1995 1996 1997 1998YEARCHANGE IN EMPLOYMENT FROM 198 9 Depository Institutions y Nondepository lenders Security and Commodity Brokers yy Insurance Carriers Insurance Brokers Real Estate Holding CompaniesSource: State of Florida ES-202, Florida Department of Labor Statistics and U.S. Current Employment Statistics, Bureau of LaborStatistics Website. "*


III Tampa Bay Financial Services: A Regional Industry in Transformation 'The growth and development of Tampa Bay s financial services industry has been influenced by the same factors as the rest of the nation. In addition, the regional industry has accommodated faster growth in its regional customer base. Growth also reflected Tampa Bay s competitive land and labor costs, which motivated larger national financial activities to locate support centers in Tampa Bay. Relaxation of restrictive state laws on bank competition led to consolidation of bank management and employment in national centers outside the region in the early 1990 s. In the past few years new community banks have generated employment and lending activity for small businesses. Tampa Bay's Financial Services 1980-2000. In 1980 financial services businesses employed 51,518 persons in Tampa Bay. Over four-fifths of all employees worked in one-office county banks, local insurance companies and real estate offices. State law prohibited branching and expansion across Florida county boundaries by individual banks. County banks were restricted to a single location. Chase Manhattan Bank and Citicorp had no presence in Florida in 1980. Only two of the then Big Eight accounting firms could officially do business in the state. By 1998, employment in finance, insurance and real estate had risen 91 percent to 98,489. Over the same period U.S. finance, insurance and real estate employment rose by only 37 percent. Tampa Bay is home to regional divisions of nation-wide banking concerns as well as to local community banks. Tampa Bay is home to major accounting and consulting firms. PricewaterhouseCoopers operates its National Administrative Center in Westshore in Hillsborough County. Insurance carriers, including major U.S. insurance companies such as St. Paul Property and Casualty, Geico, USAA, and MetLife, employ over 21,000 workers in the Tampa Bay region. In 1970, Raymond James and Associates was a growing regional brokerage and investment banking firm that employed 225 persons and earned income of slightly more than $3 million. Raymond James currently earns over $1.2 billion annual income, and, as of 1995, had 800 locations nationwide and employed 3,900 workers in its headquarters complex at Feather Sound in Pinellas County. Financial Services Respond to Growth in the Tampa Bay Economy. As is the case with many other forms of financial contracting, loan underwriting relies on an information-based valuation process. The process of valuation is based on a continuous flow of information, and lenders naturally have located proximate to their customers in urban areas. Urban locations facilitate person-to-person contacts between purveyors of financial services and their customers. For the same reason, financial markets that also function as mechanisms for valuing assets have clustered in central cities. There they have maximized their access to information generated by regional financial markets concerning issuers and buyers of securities. For these reasons a large portion of financial services activity is intra-regional, and a region s financial services employment rises with the number of individuals and firms to be served in the region. As the size and complexity of the region increases, the size and complexity of the financial services businesses in a region increases apace.The influence of a region s population on the volume of its financial industry revenues is apparent in Chart 5. Chart 5, which relates financial services revenues to the populations of selected Florida metropolitan areas, shows a strong correlation between financial services activity and the metropolitan area population. Chart 5 not withstanding, not all employees of financial services establishments serve the local customer base in Tampa Bay. Head-quarters of multi-regional institutions serve the organization s entire customer base as well as providing services for local branches, affiliates and subsidiaries. In Tampa Bay and other metropolitan areas, the presence of a supportive infrastructure encourages location of finance and related firms that serve statewide, national, and international client bases. Chart 5 Revenues of Selected Financial Services Industries and Population of Florida Cities 0 1 2 3 4 5 6 7 05000001000000150000020000002500000300000035000004000000 POPULATIONREVENUES ($BILLIONS)Miami Tampa/St.Petersburg/Clearwater Orlando Daytona Beach Fort Myers West Palm BeachSource: 1997 Economic Census and U.S. Metropolitan Databook, 2000. ""


Formation of a Financial Services Industry Cluster in Tampa Bay. Michael Porter (1990) argues that, upon reaching a certain size and degree of complexity, regional industries may create synergies that generate innovation and foster efficiency. Regional suppliers provide crucial labor and raw materials at favorable prices. Customers and suppliers provide expertise and create incentives to develop new products and services that will be successful in the broader global marketplace. And intra-industry collaboration and partnerships enhance efficiency. A regional industry that generates one or more of these synergies is poised for sustained profitability and growth. Porter characterizes the relationships between an industry, its suppliers, local infrastructure and the regional customer base as an industrial cluster, and represents the cluster in the form of a diamond. A representation of Porter s diamond for Tampa Bay s financial services cluster is pictured below.Tampa Bay Financial Services ClusterThe concept of cluster development applies with special force to regional industries that are undergoing rapid technological change and market evolution. Adaptation becomes a key factor for firms in these industries. Symbiotic relationships between local financial institutions and their customers, and financial firms with regional, national, and even international customers, exemplify the Tampa Bay financial services industrial cluster. Porter s diamond suggests that the reciprocal relationships of financial services firms, business services, real estate firms and the industry s customers all provide finance and insurance firms with a competitive advantage that stems from cost containment, productivity growth, and assistance in developing new products and services. Competitors, Suppliers, and Customers. A 1991 study by Stanford Research Institute (SRI) identified financial and business services as one of five industry clusters that would lead the Tampa Bay economy in the ensuing five years. The region in 1991 had become home to a number of non-depository credit institutions that serviced customers outside of the local region. These firms were supported by a robust regional financial services industry that included banks, insurance companies, and real estate firms. Tampa Bay had developed a significant pool of trained financial specialists, and labor costs and real estate costs were competitive by national standards. Regional educational institutions provided extensive skillsbased training in finance related occupations. Discussions with economic development experts and industry representatives in Tampa Bay informed CEDR that many area businesses whose activities are not classified in Federal and state industry classification systems as finance, insurance or real estate are, nevertheless, integral parts of the regional financial services cluster. Some of these businesses provide legal, accounting, and consulting Local Financial Services Local Resources Related & Supporting Industries Regional Customer BaseWorkforce Real Property Real Estate Utilities Information Services Legal Services Accounting & Payroll Management Services Computer Systems Administrative Support Competitors, Suppliers, Strategic Alliances & Partnerships Financial Infrastructure, Export Sectors, Households, Local Public Sector "%


services. Others provide telecommunications and information services to Tampa Bay financial firms. Still others provide a variety of business services, including employee management, computer systems design, data processing, and space management. Business and professional services firms are major suppliers of services to the financial industry, and work with legal, accounting, and management professionals who are employed by finance and insurance firms. The development of Tampa s financial services cluster reflects the rapid growth of population and business activity in Tampa Bay. Its formation also reflects the same factors that explain the evolution and adaptation of financial services nationally and internationally, i.e. deregulation, innovation and telecommunications technology. A number of national financial services firms have placed substantial assets in Tampa Bay over the past three decades. Their decisions were stimulated by changes in Florida s regulatory and statutory environments as well as by workforce availability and competitive real estate costs. They are supported by regional economic development officials and by regional educational institutions. A time-line of some regional developments provides a framework of the industry s growth.1968 MetLife Insurance located its first regional service center in Tampa 1969 Accounting profession opened to non-Florida-based firms 1970 Life insurance premium tax lowered for regional/national insurers 1971 MetLife Property and Casualty Insurance located a regional underwriting/processing center in Tampa Tampa International Airport is completed 1972 Florida Environmental Land Management Act and Development of Regional Impact (DRI) 1973 MetLife opened worldwide group health insurance center Republic Bank opened in St. Petersburg Hillsborough Community College started health insurance courses 1974 Tech Data Corp. established in Clearwater 1976 MetLife opened first regional head office 1977 Florida unit banking regulations dismantled 1978 Colonial Penn Insurance established company s first regional office in Tampa 1981 Price Waterhouse located National Administrative Center in Tampa IBM Corporation located its National Data Center in Tampa 1982 Raymond James Financial occupied new 85,000 square-foot headquarters building Lake City National Bank was the first Florida bank acquired by out-of-state bank 1983 Citicorp relocated its traveler s check division in Tampa Hillsborough County School District started Industry Services Training Program 1984 Florida Growth Management Act mandated 5 year phase in of concurrency Existing Development of Regional Impact (DRI) areas exempted from concurrency Chase Manhattan Corp. located its mortgage division headquarters in Tampa 1986 GTE Smartpark Program-advanced telecommunications services-initiated in Tampa Interstate 75 opened eastern Hillsborough County to commercial development 1987 GTE Data Services moved to smartpark Tampa Telecom Park Raymond James Financial opened 180,000 square-foot corporate center at Feather Sound 1988 Chase Manhattan Corp. consolidated and expanded in 450,000 square-foot building near TIA 1990 Equifax incoming customer service national center located in St. Petersburg 1991 Study by SRI International identified the financial services cluster in Tampa Bay 1992 Salomon Brothers located its Global Transaction Processing Center in Tampa Raymond James Financial occupied additional 120,000 square-feet at Feather Sound 1994 Chase Manhattan mortgage headquarters moved to Columbus, Ohio T. Rowe Price established regional client services/data center in Tampa 1995 American Express moved its regional travel delivery service center to Tampa GEICO Direct located in Lakeland 1996 USF&G Insurance (St. Paul Company) located customer reception center in Tampa Beneficial Corporation (Household Int l) relocated customer service and data operations to Tampa MetLife consolidated operations in its Tampa Financial Business Center Capital One Financial Corporation located national customer service center in Tampa 1997 Chase Manhattan added 1,114 new jobs at regional headquarters and credit card center Citibank began construction of Citibank Center Tampa on I-75 corridor USAA relocated southeast home-office to I-75 corridor in North Tampa Learey Technical Center in Hillsborough County founded customer service training center"&


1998 PricewaterhouseCoopers selected Tampa for its international information training center Intermedia Communications headquarters established on I-75 Corridor NationsBank (Bank of America) Tampa call center opened Raymond James occupied additional 300,000 square-foot building on Feather Sound Campus Capital One expanded employment in new campus at Renaissance Park in Tampa 1999 Chase Treasury Solutions announced planned relocation to Tampa MetLife Foundation Accounting IT Lab at USF School of Accountancy Bear Sterns Technology Development Center at USF Information Sciences Building Ceredian Benefits Corporation relocated to St. PetersburgDeregulation. Florida-based bank holding companies such as Sun Bank and Barnett Bank actively acquired other independent banks during the 1970s, but individual banks effectively were restricted to operating at single locations. In 1977, Florida regulations that prevented spatial competition among banks were dismantled. Many of Florida s banks, savings institutions and credit unions responded to deregulation by expanding their service areas to compete on a regional and statewide basis. In 1981, the Florida legislature removed the remaining restrictions on the annual rate at which banks created new branches. Interstate banking came to Florida in 1982 when NCNB (the North Carolina National Bank, now Bank of America) acquired the First National Bank of Lake City (Yockey, 1999). NCNB s acquisition opened a path for bank mergers within the southeast U.S., a path ratified by the Florida Legislature in 1984 under the Regional Reciprocal Banking Act. In 1997 state law was amended to remove all restrictions on interstate banking. The removal of geographic restrictions on branch banking and interstate banking put Florida s commercial banks on a more equal footing with securities firms and insurance firms in terms of spatial competition. Restrictive legislation had also hampered the growth of other kinds of financial businesses in Florida. Prior to 1969, in order for a CPA firm to do business in Florida, every partner in the firm had to be a Florida-licensed CPA regardless of the state in which he or she practiced. Only two of the major national accounting firms, having been grandfathered into the state before this requirement was established, were doing business in the state under their own partnership agreements. Upon the removal of the Florida CPA requirement, the major firms moved into the state. Many merged with the larger Florida-based CPA practices. Price Waterhouse in 1979-80 became one of the first companies to locate a significant administrative center in Tampa Bay. Following the merger of Price-Waterhouse and Coopers Lybrand in 1998, the new company consolidated its support activities in its National Administrative Center, in the Tampa area, after an intensive nationwide search for the appropriate site. Florida s attractiveness also proved to be influenced by state taxes. The state legislature reduced a State of Florida tax levied on life insurance premiums for firms that had substantial client bases outside of Florida. The tax reduction improved the economic climate for life insurance companies. Subsequently, three large national firms MetLife, Colonial Penn and Prudential Insurance established operations in Tampa Bay. As improvements in the tax and regulatory environments helped to set the stage for Tampa Bay s emergence as a financial services center, national firms took notice of other Tampa Bay area attractions, especially the competitiveness of the region s labor and real estate costs. As innovations in information technology prompted national firms to diversify operations and service activities during the 1990s, Tampa Bay became a prime contender for new financial services facilities. Companies such as Chase Manhattan, Citicorp, and State Farm Insurance followed what became a common relocation strategy to Tampa Bay. Large national firms moved small operating units to the region. The success of these operations motivated the companies to move additional units and support facilities to the region. In a number of cases, firms united several independent operations under a single roof in a campus environment Human Resources, Education and Training. Tampa Bay s relatively low cost of living translates into affordable employee costs. Financial services firms also require employees with financial expertise and related technical skills. When, during the past thirty years, entrants into the Tampa Bay financial services cluster required employees with several types of specific skills, they have been able to turn to the region s county school systems, community colleges, and universities to fulfill their training and education needs. Financial services firms found, in the region s educational institutions, resources to staff the emerging financial service cluster s workforce.",


Learey Technical Center, a unit of Hillsborough County Schools, provides company specific training in business skills using state funds for quick response training. Learey staff specializes in teaching accounting, marketing, finance and other business skills to employees of companies such as Beneficial of Florida, Citicorp, and Time-Warner. St. Petersburg Junior College and Hillsborough Community College offer certificate programs as well as associate of arts degrees that incorporate basic college courses in a wide range of technical specialties including accounting, economics and computer-related skills. Tampa Bay is home to a number of college and university educational programs. Several resident colleges and universities provide advanced business education to employees of the growing financial services cluster. The University of South Florida (USF), a public university, offers bachelor, master, and doctoral degrees in major business disciplines. USF also has regular and executive MBA programs. Furthermore, USF s undergraduate accounting and finance programs expanded in the 1980 s to supplement the pool of managerial and sales specialists required by the growing number of regional finance and finance-related firms and the new entrants into the regional financial services cluster. Sponsorships by Salomon Brothers in the early 1990s and later by Bear Stearns, helped spur the growth of the USF s accounting and information sciences programs to their current status as premier programs in the country. The University of Tampa, located in Tampa s central business district, Florida Sourthern University in Lakeland, St. Leo s College in Pasco County, and Eckerd College in Pinellas County offer degrees in several business disciplines and MBA degrees. Infrastructure. The developing financial services cluster required sufficient office space located on accessible sites in order to accommodate growth and to consolidate a growing number of business activities. During the past twenty years, as the cluster s real property requirements have increased, land use regulations in Tampa Bay have become more, not less, restrictive. Permitting for development in the region became more expensive and time consuming. Greenfield site development in Tampa Bay is subject to regulation in terms of environmental, transportation, and educational impacts. The 1972 Florida Environmental Land Management Act made provision for landowners to develop regional impact statements (DRIs). While expensive to prepare, DRIs essentially pre-permit sites within large properties for rapid multi-use development. DRIs lower the cost of site preparation and shorten the time it takes a financial services firm to develop and occupy a large purpose-built facility. When a relocating firm requires significant developed space, a DRI may increase the competitiveness of Tampa Bay versus competing regions. Major office centers at Westshore and in Sabal Park in Hillsborough County and in the Gateway Center in Pinellas County were developed under DRIs. Concurrency requirements in Florida s 1972 Growth Management Initiative raised the bar on new large-scale developments. Concurrency required public infrastructure to be in place prior to private development. However, existing DRIs were grandfathered in the initiative, and a supply of existing sites remained available into the 1990s to accommodate the growth of the financial services cluster.Financial services firms, responding to innovations in information technology, require sophisticated telecommunications facilities. The importance of electronic customer service and the sheer volume and size of monetary transactions conducted by financial services firms make access to sufficient bandwidth and continuous power service of critical importance. Changes in telecommunications made Tampa Bay a strong competitor for financial services firms as mobile support activities focused on labor and real estate costs. Tampa Bay has played an important role in Verizon s (formerly GTE) product and technology development. The region s importance has kept it in the forefront of the telecommunications revolution. Verizon s Smartpark Program insures that Smartpark tenants enjoy a variety of telecommunications services and redundancy of power and transmission equipment. Smartparks provide additional enhancements available upon request of tenants. Smartparks in the area include Sabal Park, developed in 1979, and Tampa Telecom Park, developed in the mid-1980s."+ “…today Franklin Templeton Investments employs more than )!*** people in %* different countries around the world— close to "!&** of whom are in St Petersburg We have found the Tampa Bay area to offer an outstanding pool of employees Our excellent colleges and universities offer fertile ground for recruiting young workers and the diverse nature of area businesses means there are seasoned mature people ready and able to accept new challenges with us as well ”Peter Jones, President, Franklin Templeton Distributors, Inc.


IV Size Structure and Impact of Tampa Bay’s Financial ClusterThis section provides an overview of the structure of Tampa Bay s regional financial services cluster. The financial services cluster provides diverse services for local and out-of-region customers. Competition is robust as befits a large and growing metropolitan area. Growth of finance and finance-related business is outstripping population growth in Tampa Bay. Firms with national and international clienteles have relocated into the area to take advantage of the pool of skilled workers, savvy telecommunications and real estate suppliers comprising Tampa Bay s financial services cluster. Firms have also been attracted by a business-friendly political environment, low business costs, highway, rail and air access, and, of course, the region s climate and access to recreation and cultural activities. Establishments and Revenues in 1997. About 25,000 of the 395,203 national finance and insurance establishments were located in Florida in 1997. One-sixth of the Florida firms were located in the Tampa-St. Petersburg-Clearwater MSA. Another 552 were located in the LakelandWinter Haven MSA, and the Sarasota-Bradenton MSA was home to 1,018 finance and insurance establishments. About 14,000 Tampa Bay business services firms, 3,153 of which were real estate establishments; 2,483 law firms; 1,402 accounting and related businesses; 856 computer systems companies and 988 management consulting firms, were located in Tampa Bay in 1997. Administrative and business support firms have become important suppliers to financial services industries. Seventytwo percent of the 359 office administration firms in Tampa Bay operated in the Tampa-St. Petersburg-Clearwater MSA during 1997. Tampa Bay was home to 452 employment service companies employing an average of 352 workers. One hundred nine of the 526 administrative and business support services firms reported in 1997 in the Tampa Bay area were telephone call centers. A call center employed an average of 45 persons. Business services companies, administrative and support companies and real estate firms generated revenues of $9.3 billion in the Tampa-St. Petersburg-Clearwater MSA during 1997. These finance-related businesses in the SarasotaBradenton MSA produced revenues of $1.5 billion and Lakeland-Winter Haven MSA finance-related companies posted revenues of $544 million during the same year. CEDR s survey of large financial services firms obtained information on a wide range of industry attributes. The survey reports tenure and ownership type, activities, customers and suppliers, and data on the characteristics of firms labor, real estate, and information technology. The region has a well-established financial services cluster. Eighty-five percent of all respondents have been in the Tampa Bay area for over 10 years. The corporate form of organization is most prevalent 75% report as corporations and 7.5% have subchapter-S corporation tax status. The survey presents the Tampa Bay financial services cluster as an integrated, developed industrial complex that supplies its clients in Tampa Bay with a full range of financial services. The size and complexity of the financial services industry reflects the diversity and depth of business activity in the region and the 3,270,000 individuals who comprise the industry s consumer demand in Tampa Bay. Eightythree percent of responding firms indicate that their most important reason for locating in Tampa Bay was to be near their local customer base. A second, smaller but significant, group of firms provides specific services to regional, national and international clients. There are indications that the presence of a skilled labor force and reasonable labor and real estate costs may be a factor in regional location of these export-oriented firms. Of the export-oriented respondents, 56 percent list a skilled labor force as most important or very important in their location decisions. Thirty-eight percent of respondents give primacy to labor costs, and 24 percent of respondents cite real estate costs/land availability as very important or most important. Most respondents consider the state of telecommunications infrastructure, of economic development incentives, and of proximity to regional suppliers to be less decisive factors in their decisions to locate in Tampa Bay. This response indicates that the benefits of the financial services cluster access to real property and business services have accrued as a result of the growth of the financial services industry and were not prerequisite to its growth. Some of the export-oriented firms are home-grown, others are subsidiaries of major national corporations, or have been acquired by firms located outside the region. There is strong local ownership. Tampa Bay is headquarters to 54 percent of all respondents, and 48 percent list the region as headquarters and main place of business. Twenty-one")


percent are divisional or regional headquarters of a firm whose corporate headquarters is located outside of the region. Twenty-five percent are branches or subsidiaries of a parent firm located outside of Tampa Bay. Of the 31 firms whose headquarters lie outside of Tampa Bay, headquarters of 10 are in the southeast U.S., 9 in the mid-west U.S. and 9 in the northeast U.S. None reported foreign ownership. Services and Activities of Tampa Bay s Financial Services Cluster. CEDR asked survey respondents to list the number of respondent-reported business relationships with customers and suppliers in Tampa Bay and outside the region. Answers reveal that the financial services cluster maintains close business relationships with suppliers and customers in Tampa Bay. Virtually the entire panoply of financial and supporting business services are offered through the regional financial services cluster. The variety of services reported offered by 10 or more of 67 surveyed firms is detailed in Table 1. Data in Table 1 lend substance to the argument that financial services firms are expanding their activities in response to deregulation and rising competition. Responses to CEDR s survey reveal that Tampa Bay depository institutions engage in nearly every major type of lending activity. Table 2 reports the lending activities of banks and of savings institutions and credit unions. Fifty-seven percent of responding banks offer sales financing, defined as the provision of collateralized goods through installment Finance and Finance-Related ServiceResponses Consumer Lending21 Real Estate Credit21 Investment Advice20 Insurance Agencies and Brokerages19 Securities Brokerage17 Commercial Banking16 Trust, Fiduciary and Custody Activities15 Credit Card Issuing14 Investment Banking and Securities Dealing13 Mortgage & Non-Mortgage Loan Brokering12 Portfolio Management12 Other Insurance Related Activities11 Accounting and Related Activities10 Source: CEDR Financial Survey Services Questionnaire: Number of Affirmative Responses Services Offered by Respondents to CEDR’s Financial Table 1 Type of Financial Service OfferedPercent ofPercent of Commercial BanksCredit Unions and Offering ServicesSavings Insts. Offering Services Credit Card Issuing 42.86%71.43% Sales Financing 57.14%14.29% Consumer Lending 71.43%71.43% Real Estate Credit85.71%71.43% International Trade Financing 28.57%0.00% Secondary Market Financing 14.29%28.57% Other Non-Depository Credit Intermediation 14.29%0.00% Mortgage and Non-Mortgage Loan Brokers 57.14%14.29% Financial Transactions Processing, Reserve, & Clearinghouse Activities28.57%14.29% Other Credit Activities Related to Credit Intermediation28.57%0.00% Source: CEDR Financial Survey Table 2 Financial Services Provided by Credit Depository Institutions "$


agreements. Seventy-one percent of all credit depository firms extend consumer loans. Four of every five regional banks lend money on real estate. Forty-three percent issue credit card debt. Non-depository firms engage in a variety of lending activities including: issuing credit card debt, sales financing, extending consumer credit and making real estate loans. Non-depository lending has grown rapidly in Tampa Bay. Survey responses indicate that non-depository lenders specialize in consumer financing as their primary activity. Table 3 lists financial lending activities of consumer lending firms. Table 3 indicates that consumer lending firms extend every category of credit and routinely offer deposit services. All respondents actively lend in the real property market and 75 percent offer commercial banking services. Tables 2 and 3 indicate that commercial banking establishments and consumer finance businesses are diversified lenders, actively competing in all regional credit markets. Credit depository institutions actively participate in many types of investment activities. Responses to CEDR s survey in Table 4 indicate that commercial banks offer a wider range of investment services than do credit unions and savings associations. Table 4 reports that 57 percent of banks in Tampa Bay offer portfolio management services, and 86 percent offer securities brokerage services. All responding banks supply investment advice and provide trust and fiduciary services. A smaller fraction provides insurance and real estate services, including Real Estate Investment Trusts (REIT) investments and real estate leasing. Percent of Consumer Lending Type of Financial Service OfferedInstitutions Offering Services Commercial Banking 75% Savings Institutions 50% Credit Unions0% Credit Card Issuing25% Sales Financing 75% Consumer Lending 100% Real Estate Credit 100% International Trade Financing 50% Secondary Market Financing 50% Other Non-Depository Credit Intermediation 25% Mortgage and Non-Mortgage Loan Brokers 75% Financial Transactions Processing, Reserve, & Clearinghouse Activities 25% Other Credit Activities Related to Credit Intermediation75% Source: CEDR Financial Survey Financial Services Provided By Consumer Lending Firms Table 3 Investment Services Offered by Percent Respondents Commercial Banksthat Offer Service Investment Banking and Securities Dealing 57.14% Securities Brokerage 85.71% Commodity Contracts Dealing 14.29% Commodity Contracts Brokerage 14.29% Securities and Commodities Exchanges14.29% Portfolio Management 57.14% Investment Advice 100.00% Trust, Fiduciary and Custody Activities 100.00% Direct Life, Health, and Medical Insurance Carriers 42.86% Direct Insurance (Except Life, Health and Medical) Carriers14.29% Reinsurance Carriers 14.29% Insurance Agencies and Brokerages 42.86% Other Insurance Related Activities14.29% Pension Funds 14.29% Other Insurance Funds 14.29% Open-End Investment Funds 42.86% Trusts, Estates, and Agency Accounts 57.14% Real Estate Investment Trusts 28.57% Other Financial Vehicles 42.86% Lessors of Real Estate 14.29% Activities Related to Real Estate28.57% Source: CEDR Financial Survey Investment, Insurance and Real Estate Services Percent of Commercial Banks that Offer Table 4 "(


Table 5 reports survey responses by investment services companies. A small percentage of investment firms also engage in the full spectrum of finance and insurance activities. About one-half provide services as insurance carriers and agents. A small fraction engages in direct lending activities and another few provide accounting and management consulting services. While insurance companies devote a majority of their efforts to their primary industry activities, roughly 10 percent of regional insurance companies engage in direct lending to consumers and in securities trading and brokerage, and 10 percent also provide a range of other business services. Real estate companies focus on the real estate sector, with onequarter of respondents providing banking trust-related services, accounting services, and a range of real estate support, which includes architectural and design services and facilities support. Business services firms responding to CEDR s financial survey include legal services, accounting and associated activities, computer design, software and programming, and personnel services companies. Responding business services firms indicate that they focus on their primary business activity and do not compete for the business of the financial services industry. Rather, financial services firms are an important source of regional demand for high-tech information services and professional services. Table 6 reports high percentages of computer and other business services, legal firms and accounting firms have customers in finance and insurance industries. Thus, financial services firms are integral customers of the related Tampa Bay cluster of activities that provide the region with management, storage and analysis of data and business information. Customers in a business cluster stimulate new product development and foster new company formation. Efforts to develop information technology in the region should therefore utilize the financial services industry as an important source of new product development and demand. U.S. law prohibits businesses other than law firms from performing legal services for third parties, although that is not the case in many foreign countries. Thus though some financial services companies retain legal staff, important legal services are outsourced by most regional financial firms. It is important for accounting firms auditing financial statements to avoid conflicts of interest. Accounting firms therefore avoid direct engagement in the business activities of their financial services clients. Investment Services Offered by Securities, Commodities,Percent Respondents and Other Financial Investments FirmsThat Offer Service Commercial Banking 16.67% Savings Institutions16.67% Credit Card Issuing16.67% Consumer Lending33.33% Mortgage and Non-Mortgage Loan Brokers16.67% Financial Transactions Processing, Reserve, & Clearinghouse Activities16.67% Direct Life, Health, and Medical Insurance Carriers50.00% Direct Insurance (Except Life, Health and Medical) Carriers16.67% Insurance Agencies and Brokerages 50.00% Other Insurance Related Activities 16.67% Pension Funds33.33% Other Insurance Funds 16.67% Open-End Investment Funds 50.00% Trusts, Estates, and Agency Accounts33.33% Real Estate Investment Trusts50.00% Other Financial Vehicles 16.67% Accounting, Tax Preparation, Bookkeeping, and Payroll Services16.67% Office Administrative Services 16.67% Facilities Support Services 16.67% Source: CEDR Financial Survey Table 5 Investments Firms that Offer Other Types of Financial Services Percent of Securities, Commodities, & Other Financial “ The financial services industry is an important source of demand for information based businesses in Tampa Bay In this way the industry provides significant high wage employment opportunities in computer tech nology and in professional business services such as law and accounting ” Bill McBride Holland & Knight Chairman, Board of Governors of the Greater Tampa Chamber of Commerce "#


As customers, financial services firms provide business opportunities for most sectors of the Tampa Bay economy. All respondents report that they purchase regional utilities, while 85 percent of respondents also purchase utilities from outside the region. Eighty percent use couriers, both inside and outside of the region. About half purchase insurance, real estate, information services and, telecommunications from suppliers in the Tampa Bay financial services cluster and an equal percentage of respondents report purchasing these services from firms outside the region. Tampa Bay s Finance and Related Industry Cluster: Customer Base. Table 6 details the financial cluster s customer base within Tampa Bay. According to Table 6, commercial banks are central players in Tampa Bay s 7-county financial services cluster. The importance of the financial services industry to the region s business services sector is manifest from Table 6. Table 6 reports intensive use of local banking services by business services firms. Between one-third and one-half of responding Tampa Bay banks count legal, accounting, and other management services firms as customers. Table 6 also demonstrates that commercial banks are prominent in the financial services sector. Over one-third of responding banks supply services to other regional credit institutions, and around one-half serve the local insurance industry. Table 7, which itemizes regional financial services customers in nonfinancial industries, shows commercial banks supply services to all industries in Tampa Bay. Three-quarters of local banks supply banking services to manufacturing, and construction businesses. Regional educational institutions use the services of nearly one-half of responding banks. Finance Related Businesses in Tampa Bay Broadcasting & Telecommunications Information services & Data Processing Credit Intermediaries Securities & Commodities Contracts Insurance Carriers Funds, Trusts, Other Investments Real Estate Professional Scientific, Technical Services Management of Companies & Enterprises Administrative & Support Commercial Banking36363618455573556455 Savings Insts. and Credit Unions001400014000 Consumer Lending50505050505050505050 Securities Brokerage 0000290290290 Portfolio Management, Investment Advice, Trust, Fiduciary, Custody333333333310033333333 Direct Insurance (Except Life, Health & Medical) Carriers 0000000000 Insurance Agencies and Brokerages297100291457575786 Real Estate Investment: Brokers, Lessors, Trusts, Related Activities50673333673367675067 Legal Services40408040808080804060 Accounting, Tax Preparation, Bookkeeping, and Payroll Services50503350505067673333 Building & Computer Design, Employment Services2525255010025252500 Source: CEDR Financial Survey Percentage of Finance-Related Firms that Sell Goods or Services to: Finance-Related Tampa Bay Businesses Table 6 Finance Related Businesses in Tampa Bay Utilities Construction Manufacturing Couriers Publishing, Recordin Non-real Estate Leasing Educational Services Commercial Banking27737327185545 Savings Insts. and Credit Unions0000000 Consumer Lending50757575505050 Securities Brokerage2929290000 Portfolio Management, Investment Advice, Trust, Fiduciary, Custody33333333333333 Direct Insurance (Except Life, Health & Medical) Carriers0000000 Insurance Agencies and Brokerages718610014144357 Real Estate Investment: Brokers, Lessors, Trusts, Related Activities50506733505033 Legal Services60808040408060 Accounting, Tax Preparation, Bookkeeping, and Payroll Services508310017331750 Building & Computer Design, Employment Services75255000025 Source: CEDR Financial Survey Non-Finance-Related Tampa Bay Businesses Percentage of Finance-Related Firms that Sell Goods or Services to: Table 7 %*


Table 8 outlines the Tampa Bay area financial services industry s customers outside of Tampa Bay. There is in general less inter-regional than intra-regional trade in financial services. For the most part, regional commercial banks serve more customers inside than outside Tampa Bay. According to Table 8, between 20 percent and 45 percent of responding commercial banks and consumer lending companies report external customers. An average 47 percent of Tampa Bay banks service all customer groups within the region and 30 percent serve all groups outside the region. Some finance and finance-related businesses have large customer bases outside the region. Tampa Bay banks have as many or more customers outside the region as in the region in the following industries: 1) credit intermediaries, 2) securities trading firms, 3) publishing and recording businesses, and 4) utilities. The large interregional banking connection reflects regional divisional interactions with the parent and other subsidiaries and correspondent banks. Non-depository consumer lending institutions are as active outside Tampa Bay as inside the region. Regional law firms and accounting firms also have strong customer bases outside of Tampa Bay 40 percent of responding law firms and one-third of responding accounting firms serve construction, manufacturing, and financial and business services organizations outside Tampa Bay. Although isolated firms in other finance-related businesses conduct business outside of the region, most of the remaining elements of the regional industry are focused on the local customer base. Tables 4 through 8 paint a picture of a financial services cluster with strong connections to the Tampa Bay business community. Financial services firms provide a wide array of services to other industry sectors in the region. In turn, financial services firms purchase many goods and services from firms in the region. Responses confirm a close relationship between finance and business services. Real estate and business services are major suppliers to the industry, and financial firms are big suppliers of services to the business services sector. Impact of Finance, Insurance, and Real Estate on Tampa Bay. When output and employment in the financial services industry grow, they generate expansion in the remainder of the Tampa Bay economy. The total magnitudes of the fiscal and employment impacts of the financial services industry on the Tampa Bay economy depend upon the quantities of goods that financial firms purchase in the region as well as upon their local sales and their sales outside of the Tampa Bay area. CEDR s survey shows that large regional financial services businesses have close connections to the regional economy. Moreover, a significant fraction of the industry s sales is made outside of Tampa Bay and brings revenues into the region. CEDR uses a dynamic economic simulation model to assess the overall impact of Tampa Bay s financial services industry on regional output. The model used is a Tampa Bay REMI model that incorporates the 7-county USF economic development service area. Total economic impact is calculated for the Finance, Insurance and Real Estate (FIRE) division of the economy.%" Finance-Related Businesses in Tampa Bay Utilities Construction Manufacturing Industries Couriers Publishing, Recording Broadcasting & Telecommunications Information Services & Data Processing Credit Intermediaton Securities and Commodities Contracts Insurance Funds, Trusts, Other Investments Real Estate Non-Real Estate Leasing Professional, Scientific, Technical Services Management of Companies & Enterprises Adiminstrative & Support Educational Services Commercial Banking2745361818272736271836272736452727 Savings Insts. and Credit Unions 0000000140001400000 Consumer Lending5075755075505050505025505050252550 Securities Brokerage14 0000000000000000 Portfolio management, investment advice, trust, fiduciary, custody 000000000067000000 Direct Insurance (Except Life, Health & Medical) Carriers 00000000000000000 Insurance Agencies and Brokerages01429 00000000001401414 Real Estate Investment: Brokers, Lessors, Trusts, Related Activities171717001717001701717170170 Legal Services04040 0000400404040404002020 Accounting, Tax Preparation, Bookkeeping, and Payroll Services3333333333333333171717333333331733 Building & Computer Design, Emloyment Services25025002500252525 000000 Source: CEDR Financial Survey Firms Located Outside Tampa Bay Percentage of Finance-Related Firms that Sell Goods or Services to: Table 8


Through purchases of goods and services in Tampa Bay, each FIRE firm creates additional spending by other FIRE firms and in other divisions of the region s economy. Refer to the initial outlays of FIRE firms as primary spending and the subsequent spending as secondary spending. The REMI model estimates 1998 primary spending of the FIRE industry at $25.6 billion, about 17.3 percent of total regional output of $148.1 billion. CEDR proceeds to simulate a reduction of FIRE output to zero in the REMI model, and queries the model on the total impact of zeroing out the FIRE industry. In this simulation, total Tampa Bay output falls by $43.8 billion. The $43.8 billion figure is the sum of $25.6 billion primary spending and $18.2 billion secondary spending. By REMI s estimate, the FIRE industry s impact on the regional economy is therefore 30% of Tampa Bay s gross spending. REMI s results are consistent with the fact that that business and financial services produced over one-third of national gross domestic product (GDP) in 1997. The REMI model estimates the ratio of $43.8 billion total spending primary spending of $25.6 billion and secondary spending of $18.2 billion to primary spending of $25.6 billion to be 1.71. FIRE s economic spending ratio of 1.71 predicts that a $1.00 decline in FIRE output will result in a $1.71 decline in Tampa Bay s total output. The ratio of total to primary spending typically runs between 1.0 and 2.0 for different industries. CEDR s ratio, 1.71, is high for a regional industry, reflecting the number of firms with national and international customer bases and the sector s large purchases of goods and services from other Tampa Bay industries. The simulated impact of zeroing out FIRE employment has a large impact on Tampa Bay s personal income and employment. The simulated fall in personal income generated from zeroing out FIRE employment results in a decline of $16.8 billion in imports of goods and services from outside of Tampa Bay. Employment drops by 382,000 persons over three employees lose their job for every one FIRE employee that loses his or her job in the simulation. And 85,000 individuals leave the region to find new jobs in other areas during the first year of the simulation. The simulation concludes that Tampa Bay s FIRE sector contributes about $26 billion directly to the regional economy and has a total impact of about $44 billion. The FIRE sector generates high-income employment and large value-added per job. Consequently, FIRE supports 382,000 jobs in Tampa Bay. V Finance and Related Businesses: Employment Trends in Tampa Bay 'Employment in Finance, Insurance, and Real Estate.Employment in finance and insurance during 1997 is summarized in Table 9. Over 5.8 million individuals nationwide worked for firms that provided financial and insurance services. Five and four-tenths percent of these individuals were employed in Florida. About one-quarter of the total, 80,664 persons, worked for firms located in Tampa Bay. Commercial banks employed 27 percent of all finance and insurance workers. An additional 40 percent worked in the insurance industry. Firms that were engage d in securities brokerage and contracts intermediation employed nearly 7,000 employees in Tampa Bay. Chart 6 shows the distribution of employment within the finance and insurance industries to be roughly the same in Tampa Bay as it is in Florida and in the nation. U.S. FloridaTampa Bay Finance and Insurance 5,835,214317,25080,664 Depository Credit Intermediation2,017,704104,11423,289 Commercial Banks1,575,39984,35620,208 Nondepository Credit Intermediation556,54334,4237,213 Activities Related to Credit Intermediation170,46314,4685,406 Securities and Commodities Contracts & Brokerage449,20123,0536,996 Other Financial Investment Activities250,13610,2403,809 Insurance Carriers1,588,01580,26920,875 Insurance Agencies & Brokerages739,29148,54512,573 Funds and Trusts35,2711,563437 Source: 1997 Economic Census National, State, and Regional Employment Table 9 %%


Chart 7 reports employment during the period 1989-1998 for depository institutions, non-depository lending institutions, securities and commodity brokerage firms, insurance carriers, insurance brokers and agents, real estate firms and holding companies. Comparison with Chart 4 reveals declining employment in banking and other depository institutions, both in the U.S. and in Tampa Bay, over the 10 year period. Nationally, bank employment fell by a little less than ten percent. The decrease reflects concentrations within the banking industry, changes in the use of technology and shifts from labor-intensive operations toward capital equipment. Tampa Bay experienced a loss of banking employment during the midseventies that was larger than the national decline. The decline reflected reorganization and consolidation in banking and savings institutions. In particular, mergers and acquisitions resulted in the loss of many familiar trademarks in banking, such as Barnett Bank. In recent years, however, bank employment in Tampa Bay has accelerated as major banks staffed regional offices, new competitors moved in from other states, and community banks formed to provide local cash management and lending services to small businesses and residents. As of 1998, employment in depository institutions was 84 percent of its 1989 level. The history of employment in Tampa Bay non-depository financial institutions differs dramatically from the experiences of commercial banks. From 1989-98, employment in non-depository credit institutions, as shown in Chart 7, trebled from 4,142 to 12,184 persons. Over the same period employment in security and brokerage related firms doubled from 4,620 to 9,154, insurance carriers added about 45 percent to their workforces, and investment company employment rose from 1,557 to 2,047, a gain of nearly 60 percent. Growth in all non-depository sectors shown in Chart 7 far outstripped the national percentage gains shown in Chart 4, reflecting Tampa Bay s stronger than average economic growth. The Tampa Bay area s rapid growth was based partly upon population increase. From 1990 to 1999, the population in Tampa Bay rose by 12 percent as shown in Chart 8. Rising employment and higher income have accompanied population growth in Tampa Bay. Gains in population and income have spurred employment in the region s nondepository financial services businesses. The rapid pace of growth in non-depository financial institutions as shown in Chart 7, also reflects Tampa Bay high-skilled workforce and the area s low cost-of-living. Employment gains in short-term business credit firms reflect the demand for financial transactions support services. Business credit companies increased employment from under 900 in 1989 to over 4,000 in 1998 an annual compound rate of increase of 18.4%. Employment in mortgage lending grew at a 13.5 percent annual rate from 1989 to 1998, more than trebling to 5,923. Employment by personal credit institutions grew least rapidly among non-depository financial businesses, rising at an annual rate of 4.7 percent. Most companies extended credit card or installment loans. CEDR s survey indicates that competition in consumer lending is intense.%& Chart 6 Employment as Fraction of Total Employment y 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40Deposit Credit Non Deposit Credit Other Credit Activity Security Commod. Broker Dealer Other Investment Insurance Carriers Insurance Agencies Brokerage Funds and TrustsFINANCIAL EMPLOYMENT CATEGORIES FRACTIONS OF TOTAL EMPLOYMENT United States Florida Tampa BaySource: 1997 Economic Census. Chart 7 Tampa Bay Employment in Finance, Insurance and Real Estate: 1989-1998 0 0.5 1 1.5 2 2.5 3 3.51989 1990 1991 1992 1993 1994 1995 1996 1997 1998YEAR CHANGE AS A FRACTION OF EMPLOYMENT FROM 1989 Depository Institutions Nondepository lenders Securities brokers Insurance Carriers Insurance Agents Real Estate Holding CompaniesSource: Florida Department of Labor ES-202 Series.


Over the 1989-98 time period, insurance brokers and agencies in the U.S. added 12.5 percent to their workforces. More rapid regional population growth helped Tampa Bay insurance brokers and agencies to add 5 percent to this rate, increasing employment 17 percent to 12,537 in 1998. Adjusting for population gains in the region of 10 percent, employment seems to reflect national trends in the insurance industry. Tampa s attractiveness as a financial services sector boosted employment by insurance carriers by 40 percent from 1990 to 1998, a clear gain over the national increase of 9 percent for the same period. In 1998 insurance carriers employed 21,485 persons in the Tampa Bay area. Real estate, another finance-related local industry, experienced declines in employment over the 1989-1998 period. Real estate professionals reporting wages and salaries in the region decreased to about 82 percent of the 21,629 level in 1989. This decline contrasts with a gain of 13.5 percent in real estate employment in the US. The prominence of the regional customer base in Tampa Bay s financial services cluster may cause firms to expand services in suburban areas in response to the growth of the consumer and customer bases in these areas. Hill and Brennan (2000) examined seven Ohio cities to look for employment trends. They find evidence that suburban employment is concentrated in retail and customer services activities, whereas headquarters and central office functions are located downtown. Immergluck (1999) finds that, between 1991 and 1996, the number of financial jobs in 49 central cities declined by 3.6 percent while suburbs enjoyed an increase of 8.0 percent. He found that central cities in Tampa-St. Petersburg-Clearwater MSA experienced a decline of 11.9 percent, a fall exceeded only by Portland, Oregon, where employment fell 16.2 percent and Miami, Florida, with an 18.9 percent drop in central city employment. What is the distribution of jobs between the cities of Tampa and St. Petersburg, and the remainder of Hillsborough, Pinellas, Pasco and Hernando Counties? Special tabulations of County Business Patterns, reported in Table 10, show the distribution of employment between the central cities and the suburbs for some types of financial services in the TampaSt. Petersburg-Clearwater MSA. The data reveal a concentration of commercial banking activities in the cities of Tampa and St. Petersburg. The main concentration of employment is in Tampa. Suburban (other metropolitan) employment comprises 55 percent of banking and about 45 percent of securities brokerage activity. Seventy percent of real estate employment is in suburban areas. Chart 8 1980-1999 0% 10% 20% 30% 40% 50% 60%1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999YEARPERCENTAGE CHANGE US FLORIDA 7-COUNTY TAMPA BAY REGIONSource: U.S. Census Bureau estimates.Population Change for US, FL, 7-County Tampa Bay Region: Tampa-St. PetersburgCity of TampaCity of St.Other Metro Clearwater Metro AreaPetersburgEmployment Financial Service SIC Classification Depository Institutions16,6505,4441,9879,219 Security and Commodity Brokers6,0161,1892,1182,709 Insurance Agents, Brokers, Services10,0383,2088865,944 Real Estate14,1602,4041,66310,093 Source: U.S. Department of Housing and Urban Development special extracts from County Business Patterns Table 10 Metropolitan Area: Selected Financial Services in 1996 Location of Employees Within the Tampa-St. Petersburg-Clearwater %,


Employment in Business Services. Table 11 reports employment in finance related businesses. Fifty thousand individuals received payment for performing legal, accounting, computing, and management consulting in Tampa Bay during 1997. Tampa Bay employment was about 28 percent of the Florida employment total in the four industries. The importance of outsourcing administrative functions in the Tampa Bay area is apparent from the figures in the table. Administrative support firms employed 204,000 workers in the Tampa Bay area in 1997. This amounts to roughly 13.5 percent of the Tampa Bay workforce in January 1997. In Tampa-St. Petersburg-Clearwater MSA, over two-thirds of all administrative support is provided by temporary staffing and employee leasing firms. Employee services account for almost 90 percent of employment in administrative support businesses in the Sarasota-Bradenton MSA. Office administration and telephone call centers are also important in the In Tampa-St. Petersburg-Clearwater MSA, employing about 5,000 workers in each activity. Occupational Characteristics of Finance and Related Workers. CEDR s survey of large financial services firms in Tampa Bay collected information to supplement published labor force data. The survey requested each firm to indicate its total number of full-time employees, part-time employees, and temporary/outsourced workers (employed through another firm). The responses of sixty-two firms are: According to CEDR s survey, the sum of full-time employment and part-time employment comprises 98 percent of Tampa Bay s total finance and related employment. Over 90 percent of employees of the responding firms held full-time positions. Survey respondents are actively seeking to fill 1,612 additional positions. Temporary workers make up a very small portion of respondents workforces. Of the 43 firms that did hire temporary/outsourced workers, seven reported that these workers are seasonal workers, and that they are hired mainly January to March. Other hiring seasons include July-September and October-December. No firms reported hiring workers for the months April-June. Fifty-seven percent of temporary/outsourced workers are clerical workers, seven percent are technical workers, and 17 percent work in professional positions. It is important to know the occupational characteristics of finance and related firm employees from a policy viewpoint, because a number of observers have raised concerns that most jobs created by finance and related firms are low-skilled,%+ Industry of EmploymentU.S.FloridaTampa Bay Legal Services1,012,09267,82213,157 Accounting, Tax Return Prep., Bookkeeping, & Payroll Services966,53354,88120,640 Computer Systems Design & Related Services764,65931,2729,772 Management Consulting Services411,04422,5316,420 Real Estate221,65016,2043,153 Administrative and Support Services7,066,658560,775203,699 Employment Services3,622,026345,942159,183 Business Support Services604,57533,9798,390 Telephone Call Centers292,31518,2624,977 Source: 1997 Economic Census Employment in Finance-Related Businesses Table 11Number of Responses toTotal Number Question 7 of CEDR Surveyof Employees Full-time 6233,683 Part-time 533,106 Temporary/ outsourced 43443


low-paid, and dead-end. In many peoples minds, the typical finance job is in a call center, earning salaries of $10.00 or less per hour. Evidence on annual earnings, presented in this report, should do much to allay these concerns. Evidence on the occupational structure of financial and related services firms was collected on two important occupational classifications technical and managerial and administrative support According to sixty-three responses, total employment by category is: The 0.73 ratio of technical and managerial personnel to administrative support can be compared with 1998 data from the National Compensation Survey (NCS) for the Tampa-St. Petersburg-Clearwater MSA. NCS estimates are: The ratios of professional and technical and managerial to administrative support computed from the tables, are 1.04 for the MSA and 0.73 for survey respondents. The ratios indicate that finance and related businesses have a slightly smaller ratio of technical and management personnel to administrative support than is true for all industries in the TampaSt. Petersburg-Clearwater MSA. Of 37,232 positions reported by the surveyed firms, 2,521 are technical-professional specialties. Twelve percent are managerial/executive, and of these, nearly nine percent are sales supervisors or representatives. The importance of legal and accounting services is also apparent. Over 2.5 percent of all employees in the finance cluster are lawyers or accountant/auditors. The fact that 80 percent of responding legal firms provide services to finance, insurance, and real estate firms testifies to the importance of legal and accounting services to finance and insurance firms. Eleven percent of administrative support staff serves in a supervisory capacity. A relatively few employees, 148, are described as financial analysts, although financial analysis presumably comprises a part of the duties of additional employees. The largest group of support personnel is customer service representatives Customer service representatives make up 46 percent of support personnel, and comprise somewhat less than 13 percent of respondents workforces. Survey respondents answered in the affirmative the question of whether the 4,756 customer service representatives worked in specialized call centers. Respondents report a total of 56 finance and related business call centers in Tampa Bay. Total employment in call centers is 4,876, the majority of whom are probably customer service representatives. The average size call center employs 87 persons. Forty-one percent offered general customer service. Technical support, direct marketing, and order-taking and sales each make up about 20 percent of the total. The accompanying table breaks down employees by age group of sixty-three survey respondents: Thirty-seven firms responded that the predominant age for technical and management positions was between 35 and 44 years of age. Only nine put this group in the 25-34 year age group. By contrast, 31 reported the predominant age group for administrative support personnel to be in the 25-34 year age group, 26 in the 35-44 age group, and only six listed%) Occupational TypeNumber of Employees Technical and Management Personnel7,417 Administrative Support Personnel10,231 Employees not Classified19,584 Occupational TypeNumber of Employees Professional Specialty and Technical Occupations67,575 Executive, Administrative and Managerial Occupations28,536 Administrative Support92,592 A g e Technical andAdministrative Mana g ementSupport 18-24 02 25-34 931 35-44 3726 over 45 176Number of Firms Reporting


most administrative support personnel as 45 or older. These responses are consistent with an increase in skills and job responsibilities with age, as financial services employees gain work experience and perhaps acquire additional formal education. Sixty-two respondents provided data about the predominant years of experience of employees in technical and management, and in administrative support positions. Twenty-one firms answered that technical and management personnel have been in their current job between eleven and twenty years. Only eight firms indicated that most support personnel had been in their jobs for that period of time. Twenty-eight firms indicated that the predominant years of experience for support staff was between two and five years. The rate of turnover for technical and management staff is lower than that of the administrative support staff as the latter move to other positions within the firm or in other firms. The responses are consistent with the existence of a regional career ladder within the financial services cluster. Technical and management personnel achieved higher levels of education than did administrative support staff. When asked what level of education most of their technical and management employees have achieved, 39 firms said college level, 12 indicated post graduate level, eight firms said junior college level, and three said high school. In contrast, 32 firms indicated that most of their administrative support staff only attained a high school education. However, 19 firms did indicate that administrative staff had junior college degrees, and 10 firms indicated that their administrative employees had achieved college degrees. Incentives, Hiring and Promotion, and Working Conditions. CEDR s survey also asked about employee incentives, hiring and promotion programs, work practices and amenities, and work schedules. National estimates derived from 1997 Current Population Survey data indicate that 42 percent of all employees are covered by a pension plan and 53 percent have employer-provided health insurance. Larger firms are more likely to offer benefits; the proportions are 14 percent and 28 percent for firms with fewer than 25 employees and 49 percent and 62 percent for firms with 100 to 500 employees. Based upon respondents to CEDR s survey, the proportion of Tampa Bay finance and related firms offering benefits exceeds the national average. Over 98 percent offer health insurance, 82 percent offer dental insurance, 48 percent provide profit-sharing employee stock option (ESOP s) retirement plans, 33 percent offer defined contribution plans, and 25 percent provide defined benefit plans. The most popular form of retirement program is the 401k plan. Ninety-seven percent of the respondents offer a 401k plan. Performance bonuses are also widespread. Three-quarters of responding firms give performance bonuses.National industry figures for 1995, reported in Table 12, rank industries by the amount of time devoted to employee training. FIRE ranks high in terms of education and training opportunities. A higher percentage of FIRE firms (95.6%) offer formal employee training programs and a higher proportion of employees receive formal training than in other industries, except the mining industry. Each FIRE employee receives about 16 hours of formal training. Employer surveys indicate that each employee gets an average of 16.6 hours of formal training, second only to public utilities and transportation employees who receive 18.3 hours of formal training. FIRE firms (34.7 hours) rank behind construction (36.1 hours) and services firms (37 hours) in terms of the most informal training of employees. These figures suggest that skill development is important to financial services firms. Years of ExperienceTechnical andAdministrative in Current JobManagementSupport Under 2 y ears 05 2-5 y ears 1128 6-10 y ears 2220 11-20 y ears 218 over 20 y ears 50Number of Firms Reporting “Financial services firms represent one of the fastest growing segments of Tampa Bay’s business community primarily because of the area’s well educated work force ” Tom James, CEO, Raymond James Financial %$


Data from CEDR s survey corroborate the national figures. In-house training is commonplace among finance and related businesses in Tampa Bay. Eighty-seven percent of respondents offer employee in-house training and 88 percent offer financial support for employees to attend professional development and certification courses. Seventy-six percent provide tuition support for employee s education and 34 companies have formal promotion and/or career development programs. The strong demand for employees in Tampa Bay is illustrated by the fact that sixty-three percent of respondents offer their employees bonuses for bringing in new employees. While employee incentives and hiring and promotion programs are popular, the same is not true for work practices and on-site amenities. Three percent provide day care facilities, 18 percent have exercise facilities, 37 percent offer banking or other services, and 28 percent provide dining facilities. Concerning work schedules, 15 percent of responding companies have a four-day (40 hours) workweek as an option. Flexible schedules are prevalent. Sixty percent of employers offer flexible hours. One-quarter allow employees to telecommute, and a small fraction, 7.5 percent, provide commuter transportation or financial support for commuting.VI Finance and Related Businesses: Earnings Trends in Tampa Bay 'Financial Services Earnings. State payroll data indicate that FIRE companies paid average annual wages in 1998 of $39,052 per employee. Average FIRE salaries are well above the Tampa Bay average wage, which was $28,563 in the same year. FIRE wages were the second highest in Tampa Bay, following wages of $42,122 in mining. Wage figures provide unambiguous evidence that high wages are part of the impact of the financial services industry on Tampa Bay. Labor markets in the U.S. are competitive. Regions compete for employees through wages and cost of living. Wages in Tampa Bay are indicative of local labor market conditions and of the skill levels of jobs in the region. Viewed from this perspective, salaries reported in Table 13 are suggestive. Salaries paid by Tampa Bay depository credit institutions, including commercial banks, were 80 percent of the national average in 1997. The gap between banking salaries in Tampa Bay and the nation is thus about six percent greater than the gap for all industries. Part of the wage differential reflects a divergence between the nature of bank jobs in Tampa Bay and the nation. It may reflect the smaller average size of banking organizations and a lack of banking headquarters in Tampa Bay. The majority of the wage differential is explained by generally lower wages across the board in Tampa Bay.%( Percent ofPercent of Type of BusinessEstablishmentsEmployeesFormal TrainingInformal Training ProvidingReceiving(Employer Formal TrainingFormal TrainingSurvey) Industry: Mining96.794.714.418.9 Construction94.771.25.036.1 Manufacturing: Durable Goods88.178.311.730.3 Nondurable Goods95.285.411.918.5 Transportation, Communications & Public Utilities96.581.418.319.7 Retail Trade88.748.83.732.6 Finance, Insurance and Real Estate95.687.416.634.7 Services93.570.711.037.0 Source: U.S. Statistical Abstract Hours of Training per Employee Table 12 Formal and Informal Training by Industry in 1995: Establishments, Employees, Hours


Salaries paid in the insurance industry are much closer to the national average. See Table 13. Insurance carriers paid 93 percent of the national average and insurance agencies and brokerages paid 96 percent of the national average wage. The close correlation of salaries indicates that job responsibilities in the insurance industry are quite similar to the national n orms. Conditions in the regional insurance industry are replicated in firms that engage in activities related to credit intermediation. Payroll expenditure per employee of non-depository credit intermediaries in Tampa Bay is close to the national average of $40,717. This amount considerably exceeds the average wage for all industries in Tampa Bay. Adjusted for cost of living, Tampa Bay wages exceed the national wage rates. The larger salary figure reflects the relocation of financial services corporations and subsidiaries of national financial services firms in the Tampa Bay area. Financial services companies process accounts, offer customer service and support, and market products globally. These companies fill a number of positions that have high skill and education components. Financial services companies are a source of workforce growth and specialization in Tampa Bay. Salaries earned by employees in securities and commodities brokerage businesses benefited from the robust performances of financial markets over the past decade. Earnings of securities brokers and dealers are considerably higher than earnings in other financial services businesses. This reflects the sales commission-based nature of the securities business. Earnings of securities firms are tied to financial market performance, and financial markets performed in a stellar manner during the 1990s. Salaries, at more than $65,000, are significantly above those in other industries both, in the U.S. and in Tampa Bay. Chart 9 presents a visual summary of the behavior of wages in seven sectors of the FIRE industry division over the period 1989-98. On average, earnings in the seven sectors rose at compound rates of between 6.2 percent and 6.4 percent per year during the period. INDUSTRY US Florida Tampa Bay Finance and Insurance$45,337$37,599$36,916 Commercial Banks$36,338$30,665$28,949 Nondepository Credit Intermediation$40,717$36,094$40,420 Securities and Commodities Contracts & Brokerage$111,270$74,342$65,621 Insurance Carriers$41,472$37,797$37,982 Insurance Agencies & Brokerages$35,672$34,801$35,215 Real Estate$25,014$22,762$21,399 Legal Services$48,474$50,959$50,606 Accounting, Tax Return Prep., Bookkeeping, & Payroll Services$27,008$25,417$26,084 Computer Systems Design & Related Services$55,123$49,038$51,526 Management Consulting Services$54,244$46,351$41,902 Administrative and Support Services$18,175$17,556$16,806 Telephone Call Centers$15,646$19,931$16,746 Source: 1997 Economic Census Table 13 North American Industrial Classification System Annual Payroll Per Employee, 1997 Finance and Insurance Chart 9 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,0001989 1990 1991 1992 1993 1994 1995 1996 1997 1998YEARANNUAL AVERAGE SALARY Depository Lenders Other Lenders Securities Brokers, Dealers Insurance Carriers Insurance Agents, Brokers Real Estate Holding & Other Investments sSource: Florida Department of Labor ES-202 Series.Financial Services Wages & Salaries: 1989-1998 %#


Business Services Earnings. Table 13 shows real estate professionals in Tampa Bay earned about 87 percent of the national real estate industry average in 1997, about the same ratio as the average across all industries. Within the industry, brokers and dealers earned about 90 percent of the national average. Table 13 also reports earnings for professional specialties in the US, Florida, and Tampa Bay. The relationships between regional and national earnings differ significantly by profession. Earnings of lawyers and accountants are near or above the national average. Earnings of computer specialists are about seven percent below the national average, and management consultants earn significantly less than average for the nation. Table 13 also reports annual incomes for employees of administrative and support establishments. Earnings are considerably lower than earnings in financial services and professional services industries. Earnings in Tampa-St. PetersburgClearwater MSA administrative and support businesses range from $12,000-$25,000. Occupational Earnings. The National Compensation Survey, conducted by the U.S. Bureau of Labor Statistics, provides information on wages and salaries by occupation. Table 14 reports wages and salaries in 1998 for several classes of occupations in the nation, in the Tampa-St. Petersburg-Clearwater MSA, in Charlotte-Gastonia-Rock Hill, North Carolina MSA a growing financial sector comparable in population size and in Miami-Fort Lauderdale, Florida s other large, multi-city metropolitan area. Average wages for all white-collar workers in the Tampa-St. Petersburg-Clearwater MSA are about 80 percent of the national average. However, when specific categories of employment, prevalent in finance-related businesses, are compared with national counterparts, the measured salary differences narrow. Executives, technical and professional workers, and administrative and support personnel working in the MSA earn 90 percent of the national average. Entry level positions, typified by many jobs in administrative support functions, display much narrower salary dispersions. Administrative support workers in Charlotte and Miami command about $12.00 per hour, which is the national average, while in the Tampa-St. Petersburg-Clearwater MSA they earn $11.00 per hour, one dollar less than the national average.VII Real Estate and Information Technology in Tampa Bay 'The rates at which firms have recently relocated, added, or deleted facilities in Tampa Bay may be an indication of recent growth in the industry. Investment in new office facilities, expansion, or relocation will only take place where warranted by expected profits and potential for growth. Over one-third of the respondents to CEDR s survey have either relocated or otherwise added or deleted locations for their business activities within the past year. Only 18 percent have been at the same facility for over 10 years. The remaining 45 percent are equally divided between firms changing their locations within the past 5 years and firms that have changed their locations in the past 10 years. Almost two-thirds of returned surveys provide complete data relating to the size and ownership of facilities. The most popular facility, comprising 28 percent of respondents, is a low-rise stand-alone building. A specific-purpose, owner-&* OccupationsU.S. MetropolitanTampaCharlotteMiami-Ft. AreasSt. PetersburgGastoniaLauderdale ClearwaterRock Hill All Occupations, Private Industry$14.95$13.03$15.59$13.59 White Collar Occupations$19.39$15.91$20.03$17.53 Professional, Technical, Speciality$24.10$21.57$22.57$22.48 Executives, Administrative, and Managerial$27.78$25.09$30.94$26.19 Administrative Support$12.00$10.91$12.07$11.92 Wages of Selected Finance, Insurance, and Finance Related Occupations Financial Managers$32.82$32.54$31.88$29.77 Accountants and Auditors$20.38$22.23NA$19.73 Lawyers$36.30NANA$41.35 Management Analysts$23.54$20.17NANA Sales Occupations$13.28$11.60$21.69$13.34 NA = Not Available NOTE: All wages for Tampa, Charlotte, and Miami-Ft. Lauderdale MSAs are for private industry only. Source: U.S. Bureau of Labor Statistics, National Compensation Survey Hourly Occupational Wages in 1998 for the US and Selected Metropolitan Areas Table 14


occupied campus style of facility is occupied by another 24 percent of respondents. Almost an equal share of survey respondents report that their operations take place either in high-rise office towers, mid-rise office blocks, or low-rise office centers. Ownership in these categories varies, where a large percentage of respondents (84%) lease the high-rise office space they occupy. Slightly more than half the respondents that occupy mid-rise office blocks own their facilities, and only about 39 percent of the respondents that occupy low-rise office centers own those facilities. Only a few firms (about 2%) occupy locations in shopping centers and all space is leased. Ownership of the facilities by 87 percent of these firms greatly outpaced leasing. Several firms (37%) acknowledged only the category of facility, and did not provide a square footage occupied and whether the facility is owned or leased. From this group, one-third occupy low-rise stand-alone buildings; other firms are almost equally divided between high-rise, mid-rise, and lowrise office centers. From all respondents, the responses are about equally divided between firms that are the sole occupant of their building and those that are not. When asked whether firms have invested in emergency equipment for power supply or communications, almost one-half responded in the affirmative. The type of internet connection used by the respondents varies. Of the 80 percent of firms that answered this question, almost two-thirds use a T-1 line. Another 13 percent use an ISDN/Frame Relay Line, while 9 percent use a T-3 line. The most common internet Service Provider used by financial services firms in Tampa Bay is Verizon, with a 24 percent of the share of respondents that answered this question. Respondents list fifteen other providers. Market shares vary from 3 percent to 11 percent of the total. This information has several implications for the future viability of financial services businesses in Tampa Bay. First, financial services firms require a technologically efficient office environment in order to function productively. To accommodate this need, firms appear to be relocating to areas where rapid internet access technology is available. In an intensely competitive environment such as that of the financial services industry, firms must react quickly to changes in technology in order to maintain market share. Firms that serve the regional business and consumer populations in large cities such as New York and San Francisco can pass increased costs of big-city location forward to customers. But financial firms and their subsidiaries that serve national clienteles will use operating costs as a factor in choosing a city. The cost of office space is a factor of primary importance in attracting cost-conscious financial services firms. Table 15 reproduces data from Cushman Wakefield s MarketBeat Report and from Plants Sites & Parks Magazine to compare real estate costs at the end of 1999. The Table reports annual rents per square foot inside and outside central business districts (CBDs) for class A and class B office space for 11 sunbelt cities, and rents by city area in the Tampa-St. Petersburg-Clearwater MSA. It is interesting to note close correspondence of office rates outside of the CBDs. Larger cities like Atlanta and Dallas are able to remain competitive by developing office space in suburban areas. They thus remain competitive in real estate costs for financial services operations serving national and regional clienteles. Tampa s real estate costs are highly competitive with the other cities reported in Table 15. CityOutside CBDOutside CBDOutside CBDOutside CBD Class AClass AClass BClass B Low-EndHigh-EndLow-EndHigh-End Denver$15.50$23.00$13.00$18.00 Las Vegas$21.00$30.00$15.00$26.00 Phoenix$18.00$23.00$15.00$17.00 Dallas$13.00$37.50$7.00$30.00 Tulsa$13.00$16.00$11.00$16.00 Birmingham$16.00$21.00$11.00$15.00 Nashville$18.00$24.00$14.00$18.00 Atlanta$17.00$22.00$13.00$16.00 Charlotte$17.00$24.00$12.00$18.00 Miami$11.00$30.00$10.00$27.00 Orlando$16.00$20.00$14.00$18.00 Tampa BayClass AClass B Tampa CBD$20.00$16.50 Westshore$23.50$19.50 I-75 Corridor$19.50$16.00 North West Tampa$18.00$15.00 Mid-Pinellas$20.00$13.50 Sources: Plants Sites & Parks Magazine Cushman Wakefield's MarketBeat Report Office Leasing Rates for Selected Cities: 1999 Table 15 &"


VIII The Future of the Financial Services Industry in Tampa Bay 'Regional Growth and Maturation. CEDR s survey of regional financial firms found that, while some Tampa Bay companies serve national and international clienteles, most have a strong local orientation. For this reason, regional growth in population and income should be good for Tampa Bay s financial services industry. Chart 8 shows that Tampa Bay population has risen more slowly than Florida s average, but much more rapidly than the average for the nation. The Bureau of Economic and Business Research (BEBR) at the University of Florida forecasts population, income and workforce by MSA and county to the year 2010. BEBR predicts that Tampa Bay will continue to outpace the nation in population growth in the next decade. BEBR estimates population growth in the seven county area of 11.4 percent by 2010 an increase of 387,500 persons from today. The U.S. Census Bureau estimates Florida s population growth at just over 2 million persons from today through 2010, following California and Texas as the third largest in the U.S. Tampa Bay thus represents 14 percent of Florida s population growth. Population growth is expected to generate 245,000 new housing units and a 66 percent increase in regional personal income totaling $63 million. The Tampa Bay area thus will be one of the fastest growing economies in the nation over the coming 10 years. Translated into financial services growth, finance industry revenues should rise by about two-thirds of their present levels to serve the region s households and businesses. Regional Competition. The presence of favorable cost factors, adequate telecommunications infrastructure, and the supplier component of the regional cluster, consisting of professional business services and administrative support companies, are enabling factors for the attraction of additional customer service and administrative centers and regional headquarters of large national finance and insurance firms. Further cause for optimism is the location of firms whose activities place them in competition for national and international markets. Survey respondents place importance on Tampa Bay s skilled workforce, affordable labor costs, and to a smaller extent, on low real estate costs. The Citicorp Citibank Center; Raymond James, Incorporated and Franklin-Templeton Investment Services are examples of non-depository financial operations that provide sophisticated investment banking, international banking, and mutual-fund expertise in the region. Service centers operated by insurers such as USAA, Progressive Insurance, and GEICO Direct attest to the region s competitiveness in financial services support activities. Declines in commercial bank employment upon the loss of banking headquarters in the early 1990s have been partly reversed. Banking services are available from regional subsidiaries and branches of national institutions and from a cadre of community banks. “Bank of America is excited about the findings of the survey which confirms our commitment to the Tampa Bay area The opportunities and growth offered by the bay area have contributed to our success Our commitment is not only from our business operations but also reflected by corporate contributions and associate volunteer hours Tampa Bay is positioned for continued growth and prosperity Bank of America looks forward to being a major partner in Tampa’s continued successful evolution ”Steve Raney, Hillsborough Market President, Bank of America "We view Tampa Bay as a strong financial services marketplace because of the financial services companies and funds based here as well as those having operations here I recently moved here to serve this market and my firm has made significant investments in Tampa Doug Bender, Financial Services partner, PricewaterhouseCoopers &%


New Technologies and Internet Finance. While the worldwide web promises to have profound impacts on finance and related services in coming decades, it has made uneven inroads into traditional businesses at this time. The web is changing the securities brokerage business. Between 16 percent and 25 percent of retail brokerage customers trade on the internet. Two-thirds of accounts managed by Charles Schwab, the leading internet firm, are web-based. Ten percent of mutual-fund transactions now take place on the web. However, online banking has developed more slowly. Only 3 percent of U.S. bank customers bank online. Observers predict the pace of web banking will accelerate. The web s impact on finance and related businesses will center in two areas. First, financial firms and their customers will exchange purchasing power over the web. Money, in the form of bank deposits, has already become electronic. Most monetary transactions between banks, among banks and clearinghouses, and exchanges using credit cards purchases and smart cards, utilize electronic communications networks (ECNs). At present, ECNs are closed proprietary systems. Web technology is reducing the costs of operating ECNs. Purchasing or selling securities recently cost the retail trader up to $100. Online trades are being offered at $25 and less. Lower costs extend to online banking as well. The cost of banking at retail branches is estimated to cost over $1.00 per transaction. Transactions via mail average $0.75; by phone, $0.60; by ATM, $0.24. The cost of a web-based transaction is uncertain, but may be as little as $0.10. The web also creates pressure to open up proprietary trading and payments systems for general use. Open systems put pressure on financial services revenues by increasing inter-firm competition and by causing not only traditional products but also the traditional services such as advice, trading, fiduciary services, and custody services, to be disintermediated. The second major impact of the internet on finance, insurance, real estate, related legal, accounting, management activities and supporting information technology is centered around access to information. The finance industry produces and uses prodigious amounts of information. Exchanges of client and firm information help the financial businesses to manage transactions, credit, and settlement risks. Innovators who are able to reduce uncertainty by improving the timing and accuracy of the information, or by reducing information costs will continue to lead financial markets. Online development of securities brokerage and dealing, as observed above, is well underway. Securities firms are competing on costs. But they are also searching for ways to deliver investment services inexpensively and accurately over the web. Non-broker firms, specializing in asset auction or in matching buyers and sellers and bypassing market makers have appeared. They have raised new questions of transactions and settlement risk, fraud, and business ethics. High-profile cases of abuse by these firms have already made headlines. What is in store for the securities broker in the new internet environment? The chance is good that he or she may have to compete with online services backed up by centralized customer service support. Migration to such services will cut into the demand for broker-client relationships. Positions for stockbrokers may dwindle and salaries may come under pressure. The future broker may extend his or her client relationships, as many brokers already have, to more general financial planning activities, including estate-planning and investment advice. We may even see broker-accountants, and broker-lawyers in the future. Many commercial banks have developed online services, and many are investing significant capital in conversion of legacy systems and solving channel conflicts between existing operations and online services. Online banks are hindered in that they cannot provide cash. They can compete for deposits, but deposits are a very competitive business. A more profitable market is in lending, where allocated costs, and hence lending rates, vary more widely. Perhaps the biggest opportunity is in customer services such as bill-paying. Electronic bill paying is customer friendly, has manageable transactions risk, and is less costly than traditional check processing. The biggest volume of online payments comes from credit-card purchases at the present time. Web technology presents commercial banks with new competition. One source of competition is pure internet banks. There are currently few pure web banks, however, and their operations are small compared to online activities of large banks such as the Bank of America. Banks also face competition from non-bank organizations that provide similar types of services, and can easily move into functions now performed by banks. Financial software, such as Intuit s Quicken and Microsoft s Money Central, can incorporate electronic bill-paying, lending, and investment services. Financial search&&


engines, examples of which are Insweb and Lending Tree, can shop for consumer and mortgage loans, insurance policies, and money market deposit rates. Large retailers such as Sears and Roebuck, Inc. and Walmart, developing online credit and payment services for customers, could then extend services to the rest of the economy. The growth of web-based finance will extend innovation into an already dynamic industry. Ultimately, however, the issues facing both customers and financial services providers will not change. Financial market participants will continue to encounter credit risk, transactions risk and settlement risk. The new trading and payments platforms must develop rules and institutions to deal with these risks, as well as provide client confidentiality and account security. Financial companies that know these issues must adapt to the new internet environment. Information sources and participants will be linked as never before in this new environment, and access to competing services, products and providers will be within reach of every customer. Firewalls between depository and non-depository credit intermediaries, securities firms, and insurance will continue to disintegrate. As firms adapt, employee skills must also adapt to new technologies and incorporate new professional capabilities. Mergers and acquisitions will continue and firms will expand their virtual presence; firms that do not adapt will disappear, and internet upstarts with new ideas, as they become financial powerhouses, will expand into traditional financial activities. And all firms will begin to look more alike. They will offer expanded products and services, and they wil l be forced to buy from each other and to offer clients services and products of competitors. Competition will remain keen. The effects of internet technology on Tampa Bay s financial services area will become clearer in the future. A primary impact of web technology will be to reduce the importance of location for a wide variety of services. If this occurs in financial services, the role of regional population and income growth in the industry s future will become less important than it has been. Cost of living, labor and real estate costs arguably will become more important, as firms compete for national markets on the basis of factor costs and local information becomes less important. Tampa Bay s low cost of living should help the region remain competitive in a world where barriers to distance are crumbling. This report presents the results of a study conducted by the Center for Economic Development Research, a Type 2 center of the State University System of Florida. The Center is part of the College of Business Administration at the University of South Florida. The findings in this report come from published data and from a survey of large financial services and financial services-related businesses in the University s 7-county economic development study area. Sources and methodology are described in the Center research monograph, Finance and Related Business Activity in Tampa Bay completed 7-10-2000. The research monograph also provides detailed descriptions of the industry classifications and of the survey questionnaire used in the study. The Center provides the research monograph at its production costs of $50.00 per copy. To obtain a copy of the monograph, mail a check or money order made payable to the Center for Economic Development Research at the following address: Nolan Kimball Coordinator of Information/Publications Center for Economic Development Research USF Downtown Center; 2ndfloor N 1101 Channelside Drive Tampa, Florida 33602&,


IX Bibliography 'Berkmeyer, J. History of Branch Banking in Florida: A Summary of the Record, 1513-1972, Florida Bankers Association, 1973. Boehne, E. Financial Modernization: Vastly Different or Fundamentally the Same? Business Review The Federal Reserve Bank of Philadelphia, July, 2000, Pp. 3-14. Budina, J. History of Banking in Florida Florida Bankers Association, 1977. Cecchetti, S. The Future of Financial Intermediation and Regulation: An Overview, Current Issues in Economics and Finance Federal Reserve Bank of New York, May, 1999. Craig, B. The Long Run Demand for Labor in the Banking Industry, Economic Review Federal Reserve Bank of Cleveland, No. 2, 1997. Pp. 23-33. Economist Online Finance: The Virtual Threat, Survey May 20, 2000. Economist The Ups and Downs of Venture Capital, May 27, 2000, Pp. 71-75. Economist Warning Signals Over American Banks, July 29, 2000. Pp. 69-70. Ernst & Young, LLP. Tampa MSA Competitive Environment 1995. Federal Reserve Bank of Atlanta U.S. and Southeastern Economies to Remain on Solid Ground in 2000, EconSouth No. 4, 1999. Pp. 3-7. Fortune/Arthur Anderson "' Best Cities for Business Survey 1997. Florida Association of Insurance Companies Impact of the Insurance Industry on the Economy of Florida 1966. Florida House Commerce Committee Bank Expansion in Florida: Potential Impact on Industry Safety, Consumers and Economic Development 1995. Florida Senate Committee on Governmental Operations Review of the Regulation of Banking and Securities in Florida 1986. Florida Trend Bandwidth: The Last Mile, January, 2000, Pp. 36-44. Frieder, L. Commercial Banking and Interstate Expansion: Issues, Prospects, and Strategies, UMI Research Press, 1985. Beatty, J. Marketing for Quality Back Office Industry: The Manual, GTE Guzman, M. The Economic Impact of Bank Structure: a Review of Recent Literature, Economic and Financial Review Federal Reserve Bank of Dallas, No. 2, 2000, Pp. 11-25. Hill, E and J. Brennan Where is the Renaissance? Employment Specialization Within Ohio s Metropolitan Areas. The Interdependence of Central Cities and Suburbs, R. Greenstein, B. Katz, and W. Wiewel, editors. Brookings, 2000. Immergluck, F Cities and Finance Jobs: The Effects of Financial Services Restructuring on the Location of Employment, Discussion paper, The Brookings Institution Center on Urban and Metropolitan Policy. November 1999. 36 Pp. Mester, L. Banking Industry Consolidation: What s a Small Business to Do? Business Review Federal Reserve Bank of Philadelphia, January-February 1999, Pp. 3-16. Porter, M. The Competitive Advantage of Nations. New York. Free Press. 1990. SRI International Tampa and Hillsborough County in Transition: A Strategy for Economic Prosperity January, 1991. Pp 66. Yockey, Ross McColl: The Man with America's Money Longstreet Publishers, 1999. Wenninger, J. Business-to-Business Electronic Commerce Current Issues in Economics and Finance Federal Reserve Bank of New York, Vol. 5 No. 10. June, 1999. Pp. 1-5.&+

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